Sharing Lessons learned - Business Process FME

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1 Sharing Lessons learned - FME University of Applied Sciences Koblenz 19 th November 2013 Fresenius Medical Care - BPM Center of Excellence

2 Agenda Welcome & Introduction Fresenius Medical Care - Company Profile Background and Motivation for BPM Designed Concept & Lessons learned Questions & Answers Fresenius Medical Care - BPM Center of Excellence Page 2

3 Introduction of Presenter Armin Heber Fresenius Medical Care Deutschland GmbH, Bad Homburg Senior Manager BPM Center of Excellence Lead Major work areas... Setup of organizational structures aligned to business strategy Implementation of process-focused organizations such as Shared Service Center design and effectiveness: development of industry-specific process architectures, business process splits and BPO ( Outsourcing) Finance and controlling, operational risk management: Implementation of risk management, reporting and compliance concepts Before joining Fresenius Medical Care... Managing Consultant at Capgemini Consulting, Frankfurt Employee at DaimlerChrysler AG, Stuttgart Executive MBA, Fuqua School of Duke University Diplom-Betriebswirt, University of Applied Sciences Würzburg Fresenius Medical Care - BPM Center of Excellence Page 3

4 Agenda Welcome & Introduction Fresenius Medical Care - Company Profile Background and Motivation for BPM Designed Concept & Lessons learned Questions & Answers Fresenius Medical Care - BPM Center of Excellence Page 4

5 100 years of Fresenius Fresenius Medical Care - BPM Center of Excellence Page 5

6 Fresenius Group Group Sales FY 2012 (bn EUR) 19.3 Employees 169,320 Dialysis Products Dialysis Care Extracorporeal Therapies Renal Pharmaceuticals Clinical Nutrition Infusion Therapy Transfusion Technology Acute Clinic Operation and Management Rehabilitation Center Operation and Management Health Care Facility Consulting Health Care Facility Planning and Management Fresenius Medical Care - BPM Center of Excellence Page 6

7 Fresenius Medical Care - profile Fresenius Medical Care - a vertically integrated company Production Research & Development Products & Therapies Global market leader in dialysis products & dialysis care Evaluation of Treatment Outcome Patient Database Patient Care Provider of other innovative extracorporeal therapies Fresenius Medical Care - BPM Center of Excellence Page 7

8 Fresenius Medical Care - patients, clinics, treatments Fresenius Medical Care North America 164,554 patients 2,082 clinics 24.4m treatments Fresenius Medical Care International Europe, Africa, Middle East, Latin America, Asia Pacific 93,362 patients 1,078 clinics 14.2m treatments Fresenius Medical Care has subsidiaries in more than 60 countries worldwide Fresenius Medical Care Worldwide 257,916 patients 3,160 clinics 38.6m treatments Status as of Q Fresenius Medical Care - BPM Center of Excellence Page 8

9 Fresenius Medical Care - overview Revenue by business segment Revenue by region Dialysis Products 24% Total Revenue FY 2012: USD 13,800 m AP LA 8% 6% 65% NA 76% EMEA 21% Dialysis Care Revenue by business segment Employees by region Services Products 9,031 m 91% 9% 4,740 m 48% 52% Total Employees Q4 2012: 86,150* LA EMEA AP 7% 10% 24% 59% NA North America International * full-time equivalents Fresenius Medical Care - BPM Center of Excellence Page 9

10 Agenda Welcome & Introduction Fresenius Medical Care - Company Profile Background and Motivation for BPM Designed Concept & Lessons learned Questions & Answers Fresenius Medical Care - BPM Center of Excellence Page 10

11 We need the insite Program to deliver the FME EMEALA business process backbone insite Mission & Key Goals What we know complexity and volumes will increase significantly by 2020 we will have doubled our business with an increased focus on new business models Today business processes are inconsistent across and within geographies and manual effort is high making the handling of additional complexity difficult The current system landscape is fragmented and does not support FME s business processes well enough What we need Mission & Key Goals Mission Create and Sustain an excellent and harmonized business processes backbone to enable us to manage efficiently future growth Key Goals Sustainability Integrity Transparency Efficiency Fresenius Medical Care - BPM Center of Excellence Page 11

12 insite delivers the business processes necessary for sustainable growth and new business models in a more complex business environment with tougher competition Goal Reduce complexity in business processes and IT solutions to enable Sustainable growth at best cost by increasing data Integrity and the Transparency and Efficiency of business performance (insite). Approach Scope Define a harmonized end-to-end business processes backbone across EMEALA and map it in a standardized SAP template. Establish a Management framework to sustain new processes. All major business processes along the value chain (i.e. Sales, Finance, Controlling, MM/Purchasing, Production, Quality Management, Logistics Execution / Warehouse, Integration to Supply Chain) across the 40 countries in the EMEALA region including Product, production and an interface to Nephrocare. Apr 11 Aug 11 Sep 11 Jun 12 Jul 12 Mar 13 Apr 13 Jun 16 Timeline 1. Foundation Phase 2. Landscape Blueprint Phase 3. Landscape Realization Phase 4. Pilot & Roll-Out Phase Core Team More than 100 team members from FME (including ca. 20 full time business process experts from countries in EMEALA region), Fresenius Netcare and the external partners. Extended Support More than 50 FME business process experts from seven representative EMEALA countries (i.e. Serbia, UK, Germany, France, Poland, Italy and Brazil) including production, providing in depth process knowledge. Fresenius Medical Care - BPM Center of Excellence Page 12

13 Fresenius Medical Care s journey of transformation to becoming a process-oriented organization Fresenius Medical Care - BPM Center of Excellence Page 13

14 insite top-level End-to-end Landscape Fresenius Medical Care - BPM Center of Excellence Page 14

15 Agenda Welcome & Introduction Fresenius Medical Care - Company Profile Background and Motivation for BPM Designed Concept & Lessons learned Questions & Answers Fresenius Medical Care - BPM Center of Excellence Page 15

16 Point of departure for achieving our business targets we need one process template as the single source of truth throughout EMEALA EMEALA E2E Template sharing our best practices from end-to-end business process perspective MDM & BI MM PROD & QM SCI & LE SALES FI & CO single source of truth respecting the specific local requirements of our countries and markets Fresenius Medical Care - BPM Center of Excellence Page 16

17 Implication of insite roadmap and related IMB decision: We need to start the initiation of the required governance structures now it s a key success factor! We need one common governance process to manage our business process template throughout EMEALA the according integrated collaboration model to run the governance process together local business roles to steer & manage local needs central business roles to steer & manage EMEALA s needs supporting roles to offer needed process management support services to the business (idea of BPM Center of Excellence ) insite 2011 insite insite Pilots UK, Serbia Blueprint Realization Foundation Pilot Analyze Design Build Test insite Timeline Subsequent Rollouts Collaboration & Community Governance 2016 BPM Capability Tool Support time Fresenius Medical Care - BPM Center of Excellence Page 17

18 Where do we want to go? To design the right governance structures, the aimed BPM maturity stage needs to be clear Pure functional organization Functional organization/ processes identified Owners with development authority FME EMEALA 2011 FME EMEALA 2020? Owners with performance responsibility, functions with resources Owners with business responsibility, functions as competence centers Pure process organization Fresenius Medical Care - BPM Center of Excellence Page 18

19 FME s challenges to establish a sustainable process-oriented culture throughout EMEALA Ensure sustainable template of insite business processes Balance the idea of business process harmonization with all local needs and specific requirements of the countries Create cross-functional & cross-country collaboration as well as needed communities along defined E2E processes Establish process performance management incl. KPI and target definition as valuable management dimension Enrich FME s entrepreneurship culture by cross-functional E2E process-mindset Ensure buildup of needed BPM capabilities on local & central level to enable success Enable needed collaboration between local and central level Fresenius Medical Care - BPM Center of Excellence Page 19

20 Collaboration Model: Steering FME s es supported by services of BPM CoE EMEALA es Order-to-Cash Sponsor Deal Management Owner Procure-to-Pay Local Owner Local (Key) User Forecast-to-Replenish BPM CoE (Center of Excellence) illustrative example! Idea & Demand Management Architect Analysis & Design Expert Consultant Develop & Test IT Solution Training & Change Manager Deployment Performance Management CoE Services Analyze/consolidate process demands Quotation/Offer Mgmt. Define Case Scope & Budget Decision preparation Modeling (Method & Content) BPM Tool Operations & Validation alignment URS- FS- /DS- document generation Coordinate IT Partner Control System Build and Test Mgmt. Project Management Local Fit-Gap Change Management Support Training Planning & Execution Go Live -Support Continuous Improvement KPI/Target Definition Root-Cause-Analysis Benchmarking (internal/external) Fresenius Medical Care - BPM Center of Excellence Page 20

21 BPM Roles, Responsibilities and Collaboration BPM Role Overview (1 of 2) Sponsor takes business decisions on behalf of all EMEALA countries resolves conflicts that cannot be resolved by Owners sponsors business process template at all organizational levels is proactive driver of cross-functional collaboration & end to end business process awareness Owner Owner is responsible owner for assigned business processes throughout EMEALA (within own Domain and for assigned end to end business processes) on central level cares about cross-functional alignment and integration of his/her business processes decides on business process demands and scope of process template releases manages identification and sharing of leading practice business processes and drives continuous process improvement Local Owner is responsible owner for assigned business processes (within own Domain and for assigned end to end business processes) in his country/on local level is the key local role to balance interests of harmonized EMEALA process template and specific local needs (business cases or compliance needs) contributes proactively in ongoing process template maturity increase by identifying and sharing leading practice business processes Key User acts as experienced process operator in her area of expertise contributes proactively in continuous process improvement by developing new process demands in reconciliation with the responsible Local Owner can be used as business process trainer or knowledge multiplier in her country Fresenius Medical Care - BPM Center of Excellence Page 21

22 BPM Roles, Responsibilities and Collaboration BPM Role Overview (2 of 2) Architect coordinates all activities of Experts and Consultants (Fresenius Netcare) in her team/area (part of BPM CoE, role and responsibility analog to existing role of Domain Lead in insite program) takes simple business process decisions within defined/given limits by herself and prepares complex business process decisions for Owner level ensures continuous end to end process awareness within her team and beyond Expert acts with profound process knowledge within the BPM CoE on central level is key driver for identification and deployment of leading practice business processes as well as for continuous business process improvement and therefore deeply involved in idea & demand management, business requirements analysis and business process template design Consultant (FNC) Training & Change Mgr. supports functional teams with his business process knowledge and IT system expertise in order to to identify and design leading practice business processes ensures fully integrated, process-driven approach for design, development and deployment of new business process template releases within methodological frame integrates business process governance with resulting IT governance for FME EMEALA prepares and supports process template release deployment by specific change activities (like impact analysis, fit-gap-analysis, training and change readiness assessment ) ensures sufficient information and communication especially between central, regional and local level to avoid typical change risks and issues close collaboration with BPM Center of Excellence is needed along the BPM Governance process Fresenius Medical Care - BPM Center of Excellence Page 22

23 Defined Governance to identify and approve demands Idea & Demand Management Decision on template release scope, local variants and further projects is taken by the central Owner (incl. Design Decision Board) 3 Sponsor EMB Sponsor Sponsor Design Decision Board Resulting from BPO s decisions, template demands and localizations are identified and ready for overall prioritization & funding procedure. Template EMEALA Template Release Project Analysis & Design IMB with Sponsors decides in case of escalation only. 2 BPM Center of Excellence Owner Owner Owner 4 Localizations (for individual country) Develop & Test IT Solution Deployment Performance Management Change (POI) Consultant (FNC) Expert Architect BPM Center of Excellence prepares demand decisions to be taken by central BPOs (scope, template relevance, priority, ) and ensures involvement and alignment with required stakeholders (incl. compliance and training). 1 Local Owner Key User of any country formulates new process demand and raises request to Regional Expert after reconciliation with Local Owner. Key User Fresenius Medical Care - BPM Center of Excellence Page 23

24 Layers of the BPM community The BPM Center of Excellence as key enabler BPS Global BPO Local BPO Key Users BPM BPO Center of Excellence Cluster I Cluster II Cluster III Cluster IV x x x x x x x Domain View x x x x x x x x x End-to-end View x x x Fresenius Medical Care - BPM Center of Excellence Page 24

25 Within the given guidelines both BPO and BPA need to define their individual way of working Collaboration BPO and BPA steers, decides, approves, delegates, Owner FME EMEALA supports, decides on behalf, guide the CoE Team, Framework Architect BPM Center of Excellence Adjust your regular way of Decision-Making! Adjust your approach for continuous alignment! Determine your individual scope and degree of delegation! Define your common agenda and top-priorities! Working relationship between BPO and BPA is key! Fresenius Medical Care - BPM Center of Excellence Page 25

26 For the local fit-gap analysis during process deployment there are 4 different scenarios foreseen Sale-or-Jail Approach Template Adoption N/A Sale Adaption Jail Adaption $ no local process adaption needed (= standard case) process not applicable for rollout country (e. g. no production) valid business case legitimates local process adaption law or other regulatory compliance causes local process adaption Fresenius Medical Care - BPM Center of Excellence Page 26

27 A transparent funding and project portfolio decision procedure will ensure realizing demands with the highest benefit for the company Budgeting and Prioritization of Demands Overall Budget Jail Adaptions Summation Jail - Adaptions Sale -Budget Sale Adaptions $ Case NPV, Net Present Value IRR, % Internal rate of return Pay-back Period, t Prioritization Project NPV RRI PP Prio 1 % t 5 2 % t 2 3 % t 4 4 % t 1 5 % t Demand Priority List Project 4 Project 2 Project 5 Project Rest 0 Further centrally approved initiatives to be funded by regional/local budgets Project Fresenius Medical Care - BPM Center of Excellence Page 27

28 BPM Status and Future Challenges Experiences & Lessons learned Top Management support is most critical success factor! Understand your starting point: How processoriented is your organisation today? There is a difference between a role concept and reality. Understand your peoples skill Never underestimate change efforts: Significant impact of change in the transformation process (changed responsibilities, level of business knowledge, new decision processes, etc.) Do not rush through! Find your own pace to transformation and consider local specifics Future Challenges Roll-out BPM Governance organization along insite into all remaining 34 countries Further ramp-up BPM Center of Excellence with resources providing the right skills and experiences Support deployment and operations at the same time Align internal IT provider structure to BPM Support governance from a tool point of view with workflows, etc. to create transparency and visibility. Next big step: Further integrate business process initiatives to create one single source of truth Fresenius Medical Care - BPM Center of Excellence Page 28

29 BPM Is People! Fresenius Medical Care - BPM Center of Excellence Page 29

30 Defined Standards And Reality Fresenius Medical Care - BPM Center of Excellence Page 30

31 Thank you very much for your attention! Fresenius Medical Care - BPM Center of Excellence Page 31

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